Detroit's Big Three Breaks Down on Wall Street With New Models, Turnaround Plans
The Big 3 might be wowing crowds at the New York Auto Show, but investors are hardly impressed. Shares of General Motors (GM), Ford (F) and Daimler Chrysler (DCX) are accelerating about as fast as a 1981 Yugo. What’s the smart trade as Detroit attempts to rev up sales?
Tonight, options trader Pete Najarian fills in for Jeff Macke. We call him “The Pit Boss.” And CNBC Auto Reporter Phil Lebeau joins the guys for the conversation.
Dylan asks if Chrysler is in the catbird seat?
Phil says Chrysler will stay in tact no matter who buys them, although restructuring will be painful. He explains Chrysler, Dodge and Jeep are so intertwined a buyer will keep them together.
Guy Adami doesn’t think Daimler should sell Chrysler – instead he thinks they should integrate it better. Phil replies the problem with Guy’s theory is the European investors who are putting heavy pressure on Dr. Z to get rid of Chrysler. And he wonders if Daimler and Chrysler can truly be integrated.
Dylan says if a private equity firm buys Chrysler and they take a crack at the union – what would be the impact across the industry?
Eric Bolling says it would be all positive. Private equity is the only group that can come in and take a crack at the UAW. In that scenario, Eric thinks all the car companies would benefit.
Phil expects to see some real change with the UAW when negotiations begin in September.
Pete Najarian says he’s concerned about Hyundai jumping into the pick-up market. Phil replies that 92% of pick-up sales are with The Big 3 – and those customers are loyal. However Toyota is seeing sales of its pick-up increase, with the Tundra.
Dylan wants to know, what’s the trade?
Eric advises investors to do nothing until they know who is buying Daimler-Chrysler. If private equity buys, Eric Bolling says then Chrysler is a buy.
Guy Adami likes Toyota (TM ) and Pete Najarian agrees.
Tim Strazzini thinks investors should walk away from the sector all together.
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On APR 4, 2007, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders Bolling Owns (DIS), (ICE), (NMX), Gold, Silver Najarian Owns (DNDN), (OI), (RIO), (PDE) Strazzini Owns (BOT), (DNDN), (SNDK), (WMT), (STM), (BRCM)